Rahejas told to file affidavit in land row

Mumbai: The row between two prominent Mumbai business families has escalated with Gopal Raheja making allegations of fraud in response to similar accusations by Nusli Wadia.

The Gopal Raheja Group has to file an affidavit along with documents to back up its allegations against the Wadia Group about a disputed piece of land in a Mumbai suburb, a court directed on Wednesday.

The Raheja Group has challenged the legal right of the Wadia Group to continue to administer 460 acres in Malad at the Bombay high court. The petition alleged that the Wadia Group fraudulently utilized the land for non-charitable purposes, using its position as administrator.

“The administrator (Wadia) has committed fraud by converting his fiduciary duty as administrator of the estate into a private estate,” said Abhishek Manu Singhvi, lawyer for Raheja-owned Ferani Hotels Ltd.

Wadia’s lawyer, Fali Nariman, contested the claim and asked Ferani Hotels to produce documents to support the claim. Justices D.Y. Chandrachud and R.D. Dhanuka asked the Rahejas to file the affidavit by 22 August. Wadia will have to reply by 10 September, and the matter will be next heard on 25 September.

Nusli Wadia, chairman of the Wadia Group, and the Gopal Raheja Group have locked horns since 2008 over a contract signed in January 1995 for the 460 acres. Wadia was appointed administrator by Bachoobai Dashkow, sister of Eduljee Framroze Dinshaw, who owned the land. Subsequently, Wadia entered into an agreement with Ferani Hotels to develop the plot.

According to the agreement, Wadia will be entitled to 12% of the sale value of the individual parcels of developed land. Additionally, the Rahejas had to pay Wadia Rs.75 crore in the first 10 years of the agreement as a minimum guarantee.

However, in 2008, Wadia terminated the contract and filed a case saying the Gopal Raheja Group had committed fraud by selling developed portions of the land to associate groups at below market value, denying his rightful share from the sales.

The high court had in July allowed Ferani Hotels to continue to develop and sell portions of the land, marking a setback for the Wadia Group.

The division bench, however, asked the Gopal Raheja Group to deposit 12% of the proceeds from the sales in a designated bank account till the litigation was settled. The court had also appointed retired justice S.K. Shah to record all sale transactions by Ferani Hotels and the evidence in the case within three months, after which a trial court will decide on the claims made by the Wadias against the Rahejas.

khushboo.n@livemint.com